Allentown developers cultivating political influence

Ceremonial Beam Signing

Harry Fisher, THE MORNING CALL

City Center Investment Corp. co-owners Joe Topper (left) and J.B. Reilly have launched a political action committee aimed at channeling their investment in Allentown’s rebirth into a campaign fundraising apparatus designed to defend those interests in the halls of local and state governments.

City Center Investment Corp. co-owners Joe Topper (left) and J.B. Reilly have launched a political action committee aimed at channeling their investment in Allentown’s rebirth into a campaign fundraising apparatus designed to defend those interests in the halls of local and state governments. (Harry Fisher, THE MORNING CALL)

The two men who have bankrolled much of the billion-dollar transformation of downtown Allentown are hoping to convert that commercial revival into a political force.

City Center Investment Corp. co-owners Joe Topper and J.B. Reilly have launched a political action committee aimed at channeling their investment in Allentown's rebirth into a campaign fundraising apparatus designed to defend those interests in the halls of local and state governments.

Since its founding in October, Citizens for Urban Renewal has dished out $47,000 in contributions to a mix of Democrats and Republicans, including Allentown Mayor Ed Pawlowski and state Sen. Pat Browne, R-Lehigh, who wrote the tax incentive law that paved the way for Allentown's booming Neighborhood Improvement Zone.

The law allows property owners such as Reilly and Topper to tap into the new tax revenues created by their projects to help pay off their construction loans.

"We're looking to support candidates who support public investment in urban renewal initiatives," Reilly said. "We're supporting government officials who show a commitment to the urban core."

The list of other Lehigh Valley legislators and candidates who received money from the PAC consists of nine Republicans and four Democrats, including Republican state Reps. Justin Simmons and Ryan Mackenzie of Lehigh County, and Democratic state Rep. Mike Schlossberg of Lehigh County. It also includes Lehigh County District Attorney Jim Martin.

The PAC's only contribution outside the Valley was a $1,000 donation to Senate Republicans in May.

So far, Reilly and Topper have been Citizens for Urban Renewal's primary backers, but that could soon change.

"As I've spent virtually all of my time on our projects in downtown Allentown, it's become clear to me that the challenges faced by the urban core are significant," Reilly said. "It takes a coordinated effort to dealing with schools, traffic, parking as well as poverty. And we will be looking to recruit like-minded people who will contribute to this PAC."

Reilly said he had no preset goals for how many people he hopes to recruit or how much he hopes to raise, but believes the PAC is needed to help promote continued investment in struggling downtowns.

Some in the Lehigh Valley believe Reilly, Topper and their new PAC already have made a surprising impact.

One of Citizens for Urban Renewal's first contributions, $5,000, went directly to Republican John Brown on the day he defeated prominent Democrat John Callahan for Northampton County executive. Callahan was an early critic of Allentown's NIZ.

A source close to the Callahan campaign said late donations from the Republican State Committee, which received a $25,000 donation from Topper as an individual in mid-October, were key in preventing the longtime Bethlehem mayor from winning the county executive seat in the Nov. 6 election.

Seeing Brown with just $7,000 in his campaign fund in June, Callahan's team assumed he would not be running a "credible campaign." As late as October, Brown reported just $20,000 cash on hand. Callahan's campaign elected not to call attention to the candidates' differences on the issues, instead relying on Callahan's record as mayor and name recognition, the source said.

Then the Republican State Committee paid for more than $80,000 in countywide mailers to super voters in the final weeks and took dead aim at Callahan.

"That was huge. Brown doesn't win that race without that money, period," the source said. "It's that simple."

Topper declined to be interviewed.

Campaign reports show Topper contributed $25,000 to the Republican State Committee three days before the committee mailed the first in a series of campaign ads on Brown's behalf at a cost of $10,385.

Reilly gave more than $40,000 to the leadership funds of state Rep. Mike Turzai, R-Allegheny; Senate Majority Leader Dominic Pileggi, R-Delaware; and state Senate President Joseph Scarnati, R-Jefferson. He said he did not dictate how the money be spent, leaving that up to the state's Republican Party leaders.

Chris Borick, Muhlenberg College political scientist, said it rarely works that way.

"You have to be absolutely naive to believe big donors don't suggest where their contribution ends up," Borick said. "It's how things are done in Harrisburg, and anyone who doesn't realize that is fooling themselves."

Reilly said the PAC money that went into the county executive race was merely to support Brown.

"I've supported John Callahan in the past and thought he did a great job as mayor," Reilly said. "In this race, I supported John Brown."

In 2012, while the NIZ was being sued by leaders in 19 suburban municipalities who worried it would siphon some of their tax revenues, Callahan, while Bethlehem mayor and a member of the Lehigh Valley Economic Development Corp., publicly opposed the NIZ. He unsuccessfully argued that LVEDC should not endorse the NIZ because it helped Allentown, while potentially drawing business tenants away from Bethlehem and Easton.

The court cases ended in July 2012 when Browne amended the state law, allowing suburban communities to keep the earned income taxes paid by their residents working in Allentown, rather than see them go into the arena fund. The redefined NIZ law and end of that legal action helped set off a building boom that's led to more than $1 billion in proposed development that includes the $177 million arena, several office buildings, a hotel and restaurants.

City Center's part in that amounts to more than $400 million — and counting — including the 11-story building that brought National Bancshares' corporate headquarters to the city, the new eight-story Lehigh Valley Health Network fitness center, and upscale apartments that are under construction.

"The NIZ developers' displeasure with Mr. Callahan was not much of a secret," Borick said. "It was everywhere. Everyone knew, or at least thought they knew."

Callahan and Brown did not return phone messages.

Even Brown supporters acknowledge that late surge of campaign dollars from the GOP and the NIZ developers pushed him to a 5-point victory.

"Well, the late money from the developers did finish the job, but let's give some credit to the candidates," said Northampton County Council President Peg Ferraro, a former county party chairwoman. "Callahan took the race lightly and John Brown worked his butt off. That difference allowed their late money to have a bigger impact."

'Best for the city'

While they've worked mostly behind the scenes in the past, Reilly and Topper aren't new to politics. Both have been political contributors for several years, supporting mostly Republican candidates, records show.

Reilly and Topper have each made political contributions of more than $100,000 to state and local candidates since the start of 2013. That doesn't include $50,000 the pair put up to fund Citizens for Urban Renewal, which lists City Center Investment Corp. spokesman Jeff Vaughan as its chairman, according to campaign filings.

Schlossberg is on a short list of Democrats who have received donations from Citizens for Urban Renewal, Reilly and Topper. He said he assumes that is because he has been a supporter of Allentown's downtown revitalization efforts, both on City Council and now as a member of the Legislature.

"They are looking to support people who support their investments both in the NIZ and in Allentown," Schlossberg said. "That is something I do because I believe what they are doing is the best for the city."

Pawlowski has been among the biggest recipients of Citizens for Urban Renewal's support. The PAC gave $15,000 in November to a newly created nonprofit called Allentown Future Fund set up by Pawlowski campaign manager Mike Fleck with the help of attorney Scott Allinson.

The money went to fund the mayor's third inaugural celebration in January, while he was still a Democratic candidate for governor. Pawlowski backed out of that race in February.

In the next decade, with help from Allentown's one-of-a-kind tax zone, City Center's total investment downtown could approach $700 million, Reilly said. And during that time, Citizens for Urban Renewal will continue to support the public officials who help make it and developments like it possible.

"As a businessman, I've been actively engaging the political process since the late 1980s," Reilly said. "My recent experiences have showed me that more attention is needed in the urban core. That's the only thing that's changed."